Tuesday, March 30, 2010

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Depending on one’s vantage point, Santa Barbara insurance agent Brent Anderson is either a courageous David doing battle against an insurance Goliath, Blue Shield, on behalf of small businesses, or an unscrupulous operator trying to rig the system while selling his customers at the Carpinteria Fire Department a bill of goods. In either case, Anderson has hired a Woodland Hills law firm specializing in insurance litigation and a private PR company, and has enlisted the support of two of Sacramento’s most ideologically opposed politicians to help him make his case against Blue Shield.

Two days ago, Anderson, a South Coast agent for 40 years, filed a formal complaint with the California Insurance Commissioner, charging that Blue Shield’s practice of barring the sale of certain policies advantageous to small businesses are “unlawful, discriminatory, anti-employee, anti-employer, anti-competitive, anti-health care access, and contrary to public health, safety, and welfare.” Conversely, Blue Shield representative Aron Ezra claimed Anderson knowingly sought to sell insurance products the company had explicitly prohibited, and terminated the producer’s license that’s allowed Anderson to sell Blue Shield policies for the past 36 years. Where Anderson has accused Blue Shield of “cherry picking its customers” and selling policies that actively discourage people from seeking health care, Ezra complained Anderson “has been gaming the system” by “selling people illegal plans.”

The conflict began more than a year ago, when the Carpinteria Fire Department approached Anderson looking for more affordable coverage. The department’s insurance policies with Health Net had been increasing about 15 percent a year. Anderson steered the Fire Department—with 37 employees—to a Blue Shield policy with relatively low premiums and $3,000 deductibles. The Fire Department would pay its employees’ deductibles—as the costs were incurred—and that way keep the policy affordable. This practice is known as “wrapping.” The only problem was that Blue Shield explicitly forbade this practice. If the department wanted to pay its employees’ deductibles, Blue Shield has insisted it had to pay that money up front, and directly to the firefighters. That way, the employees would have an incentive to more strictly ration the amount of care they sought. “If the employer is paying the deductible, the employees have no incentive to be careful about how much care they get,” said Blue Shield’s Ezra. “A plan like that, where there’s no real deductible, would be priced much higher.”

About 10 years ago, all major insurance companies began cracking down on “wrapping.” Two years ago, Ezra said, Blue Shield began requiring agents and their customers to sign statements verifying that the employers would not “wrap.” In January 2009, Anderson refused to sign that portion of the contract and instructed Fire Chief Mike Mingee to do likewise. Even so, Anderson and his attorney Mike Adreani claimed Blue Shield “accepted” the contract. When Blue Shield discovered this omission two months later, company officials notified the Carpinteria Fire Department that its contract was not valid. In response, the Fire Department signed up for a new Blue Shield policy at an additional cost of $150,000. For refusing to play ball, Anderson was terminated by Blue Shield. Not only does that prevent Anderson from selling any new Blue Shield policies, but it makes it exceptionally difficult for him to service his existing Blue Shield customers, who he estimates make up 25 percent of his customer base. Incidentally, Blue Shield would later increase the cost of Fire Department’s policy by 47 percent, or $80,000, prompting Chief Mingee, once again, to look elsewhere.

Anderson claims the no-wrap policy is illegal, that it violates a 1993 state insurance law requiring that “all health care plans must be fairly and affirmatively marketed and sold to all small employers.” Written into this law is the goal of promoting greater access to health care for small employers, not less. Because Blue Shield’s no-wrap policy actively discourages people from seeking health care, Anderson contends, it’s illegal. Unfortunately for him, the Department of Insurance issued an official ruling in 2008 stating that the no-wrap policy was, in fact legal. “We don’t think the Department of Insurance is seeing all the issues,” said Anderson. “We’re asking them to take another look.” In the meantime, Anderson bristles at the suggestion he’s “gaming” the system. “We’re talking about losing hundreds of millions in premium dollars here,” he said. “Who do you think is playing games?”

Comments

Imposed rationing? We all have to suffer because some people are sick with hypochondria? CEOs are the over-paid rationing bureaucrats. The relief of a single payer Medicare for all system would eliminate the communists blood sucking bureaucratic CEO mob bosses that are rationing your health care. We'd have to keep check on the government single payer system but that is what democracy is all about. You are supposed to be an involved, informed and fair minded citizen for democracy to work. You are supposed to be and involved and fair minded citizen to manage the commons and provide for the general welfare of the people.

Bravo Brent!! It is one more example of how the insurance companies have no interest in health care and how the insurance commissioner is in their pocket. I guess we should thank Blue Cross/Anthem as they continue to help the cause by being so blatant. We need more crusaders like Brent, thanks for sticking your neck out. I hope your CLU buddies rally round and help in this fight

Any surprise? The ONLY thing I'm surprised @ is people's surprised attitude.Insurance companies (NOT THE AGENTS) are in it for 1 thing only: $$$$$$$$$$.That means if insurors can deny their loyal customers from getting the care/coverage they need then they keep all the $ their customers put in.Insurance is 1 HUGE pyramid scheme. People put $ in, the insuror(s) hope & pray that not all the customers (you & me) will file simultaneously because all the $ will then dry up.Basically stated, there's only enough $ in place to seem like something could be done for customers should the fit hit the shan.But when the fit hits the shan then customers in need are simply denied coverage due to some frivolous technicality.Meanwhile, premiums keep increasing. Win/win for the insurors, lose/lose for the customers.In the past insurors would gladly pay for customer's medical needs, but as time went on people on both sides (customers & insurors) learned to bilk each other. Insurance fraud by some greedy customers led to losses for insurors, insurors began increased scrutiny over all customer's claims, this scrutiny then got mixed w/ CEO style greed so that the average customer is now treated like a fraudulent criminal, therefore coverage is limited @ best, not provided @ worst.Now the governement wants in on this scheme? By far the cruelest joke ever!So please, don't seem surprised by any of this. Accept the reality that insurance companies are out to do 1 thing only: Keep the customer's $ @ ANY cost, even if it means suing a loyal customer for everything said customer has.Insurors have huge teams of lawyers willing to do this service @ reasonable rates to insurors :) henry

Thanks Mr. Anderson.It is time for California OneCare ( http://californiaonecare.org/ ) and say to heck with all the middle guys and lack of group size able to negotiate with the hospitals and pharmaceuticals. If other countries like France, Taiwan, Japan, Canada, Great Britain and others can reduce the medical costs to society (by half?) and seem to have greater service without "agents" and for profit corporations, then we need to catch up.

Reader, you're missing 1 significant piece to your query: TAXES.In those countries listed a huge portion (anywhere from 40%-60%) of your paycheck goes for "socialized medicine" as we've grown to call it.Another thing is that the care provided isn't really up to par, the waiting list for treatment is extensive, the doctors are way overwhelmed by patients that really have a minor issue, some of the doctors are undertrained & the government is raking in max $ for minimal care.Don't worry though, we're on our way there w/ the new bill being passed, then you can put the US on the same standard.Heck, even Fidel Castro has taken the time from his stint w/ senility to praise & laud the new US health bill's passage.That's what we're going to get: A bill, a HUGE bill :) henry

A list of the percentage of countries' personal income tax percentages (USA is already 5th highest, and we don't even have "socialized medicine" for all; note Canada, UK & France are all paying less personal income tax -- and they do!):http://www.nationmaster.com/graph/tax...

This study compares Australia, New Zealand, the UK, Canada, and the US for health care satisfaction and inequities; guess what? No one is happy, and we're the least happy, especially with health care access:http://content.healthaffairs.org/cgi/...

Sure, the cost of public health comes from taxes in most modern economies in the world. But they do it soooo much more efficiently than we do. And the quality of health care as measured by outcomes is superior to the US. The reason? We are based heavily on a for-profit system with middlemen. Taxes, while not insignificant, are not the root issue here.

I am not an apologist for the insurance industry....it has many faults. It is incumbent upon us (I am in the industry) to know the rules each carrier has in place so we can provide clients with proper coverage within those guidelines. Blue Shield, right or wrong, had rules in place about wraps and products that were ineligible to sell. Challenging any premise that seems unfair is noble. Putting clients in the middle of that fight whereby their financial well being could be compromised is a different story. Not knowing the rules or simply ignoring them is unacceptable from any professional. So, yes, stand up to the injustice in the system. We do so often. There are times we have even sued our own insurance carriers for an injustice to our clients. But professionals need to be very careful (whether intentional or not) about putting a consumer in a bad position because the fight was not won at the proper level. Especially if it is being fought without the consumers' knowledge that they were part of the battle.

Hank, I've lived in Australia and UK and dealt with the healthcare systems in both countries, the quality of care was better than the USA and the waiting times weren't very long...I have a rare condition which requires specialized endocrinologists and with a referral from my gp I never had to wait more than a week or so to get in with the specialist. If you have an urgent need, they fit you in. In the USA, just one of my medications costs $3,000 per month...no insurance will take me because it's a pre-existing condition...in the UK, all my care is FREE, in Australia the same medication is $320 a month. I don't think a person/family should have to worry about going bankrupt if someone ends up with a serious medical condition. If I were still in the states, just my basic needs would cost a minimum of $5,000 per month....that doesn't include the regular ultrasounds, MRI's, CT's and other medications I have to have. All totaled, it's about $75,000-$100,000 a year just for healthcare in the states....would you be willing or able to pay that for the rest of your life if you had this condition?